BERLIN (ICIS)--Overcapacity, especially in China, remains a major concern for the global synthetic rubber (SR) industry, a representative of a rubber trade group said on Tuesday.
“We have been talking for three years about overcapacity of SR, and still, you can see already that overcapacity is the single greatest challenge for the SR industry,” said Roxanna Petrovic, general director of programs at the International Institute of Synthetic Rubber Producers (IISRP).
She made her comments during the 5th ICIS European Butadiene & Derivatives Conference in Berlin, Germany.
In a breakdown of individual sectors, overcapacity has led to the idling of several polybutadiene (BR or PBR) facilities in China.
Fujian Fuxiang Chemical and Sinopec Baling Company idled their PBR plants in late 2013, while YPC-GPRO Rubber and PetroChina Jinzhou shuttered their PBR plants in early 2014, according to the IISRP.
Other idled PBR facilities in China include Shandong Wanda Chemical and Shandong Huamao New Materials in 2015, as well as Sinopec Shanghai Gaoqiao in 2016.
Global PBR operating rates stand at 65%, Petrovic said.
However, there continue to be new PBR plants and expansion projects, expected to come on line in 2016 and 2017.
In other sectors, the emulsion styrene butadiene rubber (E-SBR) operating rate in the global market is around 67%, with demand showing a downtrend.
Still, new capacity is expected to come on line in 2018.
There is, however, positive demand trends in other areas in the SR industry, Petrovic said.
Solution styrene butadiene rubber (S-SBR) operating rate has been higher at 71%, with demand showing a positive trend.
The IISRP is also seeing positive demand trends in other sectors such as ethylene propylene diene monomer (EPDM), nitrile butadiene rubber (NBR) and styrene butadiene block copolymer, with global operating rates at 74%, 76% and 80%, respectively.
Petrovic said that slow growth in the downstream tyre markets have impacted the SR market by causing delays in the start-up of these expansion projects.
The 5th ICIS Butadiene & Derivatives Conference takes place 13-14 September.
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INSET IMAGE: A stack of rubber tyres. (Design Pics Inc/REX/Shutterstock)